Barney Frank

Mr. FRANK of Massachusetts

Mr. FRANK of Massachusetts. Regular order, Mr. Chairman.

Mr. FRANK of Massachusetts. No. Let me explain this to the gentleman from Texas. I yielded to him twice. I am not going to continue to let the gentleman from Texas evade the issue by not debating this bill. He has his own time. I am not going to waste the limited time we have to explain this bill with this kind of continued lament for the passage of a complaint. What the bill says--and what I want to stress--is that it is only for people who get capital funds under the TARP. This does not interfere with small business lending. It does not interfere with people participating in the impaired asset program, and I can guarantee that it will not be so extended. It says, if you get a capital contribution under the TARP bill, as long as you have that contribution, you cannot make payments that are excessive and unreasonable. You can give bonuses if they are performance-based, and it repeals what the Republicans have been complaining about. Mr. Chairman, in closing, let me say I condole them on their loss. Their attachment to what they hated is truly impressive, but they are going to have to live with the fact that we are going to undo that and that they are now going to have to talk about what this bill does. I reserve the balance of my time.

Mr. FRANK of Massachusetts. No. I'm sorry. The gentleman wants to debate a bill that was passed in February. He can have all of the Special Orders he wants in order to beat that dead horse, because it is a dead horse, Mr. Chairman. This bill that he does not want to debate the merits of, that he is probably prepared to vote against and is looking for some reason to, undoes what was done back then for the recipients of TARP funds. So that is the issue. This bill was marked up in committee. It was fully debated in committee.

Mr. FRANK of Massachusetts. Yes.

Mr. FRANK of Massachusetts. I will take back my time to say that this is the bill that came out of the Financial Services Committee, and this was not out for 72 hours. It was out for much more than 72 hours. We, in fact, marked up the bill, with amendments, in an open markup last Wednesday. We voted on it on Thursday.

Mr. FRANK of Massachusetts. Regular order.

Mr. FRANK of Massachusetts. I will take back my time. The bill under consideration is 5\1/2\ pages. I believe even the gentleman from Texas could have read it by now, and if the gentleman from Texas has not been able to read this 5\1/2\-page bill, I will talk long. Even if you read slow, you'll get it done. The point is that this bill undoes what he is complaining about. Note the refusal to address the subject. The complaint was that the amendment in the recovery package said that bonuses in the past given by AIG or by anybody else would not be covered by the restrictions in that bill. This undoes it. This takes it away. My colleagues on the other side are kind of like kids who have had a toy bear or a blanket, and this security blanket means a lot to them. Their security blanket is being able to complain about something that happened before the break. This bill undoes what happened before the break and makes it a nullity. They at some point, Mr. Chairman, have to outgrow the security blanket. Now, of course, here is the real problem. They do not want to vote for a bill that restricts excessive pay and unreasonable bonuses. The gentleman from Texas has now had a chance to read the bill and has a question for me about this bill.

Mr. FRANK of Massachusetts. I'm sorry. The gentleman has twice asked me to yield for questions.

Mr. FRANK of Massachusetts. Mr. Chairman, I will yield myself as much time as I may consume. This is really extraordinary. What you have just heard is a denunciation of something that was done by the Congress a few weeks ago and a refusal to undo it. I have never seen people, Mr. Chairman, so attached to something they hate. This is presumably a psychological disorder which I am not equipped to diagnose. The objection of the gentleman from Texas was that, when the recovery bill was passed, it was passed too quickly. We signed it that night. It included a provision that should not have been in there. This bill takes it out. It takes it out in a way that makes sure it will have had no effect, because it dealt with something in the past, and it is undone by this. Speaking about being undone, my Republican colleagues were being undone by the loss of their whipping boy.

Mr. FRANK of Massachusetts. Yes. This bill deals only with compensation, not with travel. The gentlewoman referred to incentive travel. Any incentives that were performance-based would be fully allowed. If by selling a certain number of things you earned a trip, that would be allowed. So it specifically does not deal with travel for the business. It would allow performance-based incentives for this or for any other purpose.

Mr. FRANK of Massachusetts. I thank you, Mr. Chairman. I now recognize for 2 minutes----

Mr. FRANK of Massachusetts. Would the gentlewoman yield further?

Mr. FRANK of Massachusetts. I will yield.

Mr. FRANK of Massachusetts. I am an opponent of the amendment.

Mr. FRANK of Massachusetts. Mr. Chairman, I have only one speaker remaining.

Mr. FRANK of Massachusetts. I will be the closing speaker so the gentleman may proceed.

Mr. FRANK of Massachusetts. I yield the gentleman an additional 30 seconds.

Mr. FRANK of Massachusetts. How much time do I have remaining, Mr. Chairman?

Mr. FRANK of Massachusetts. Mr. Chairman, I want to begin by recognizing the two Members who are the main authors of this bill, and I will begin with 2 minutes for the gentleman from Florida (Mr. Grayson).

Mr. FRANK of Massachusetts. Will the gentleman yield?

Mr. FRANK of Massachusetts. The gentlewoman was not a Member of the Congress when those events transpired.

Mr. FRANK of Massachusetts. I yield myself the remaining time, first to say that this dangerous step was of course taken--if you think it's a dangerous step--last fall, when, with the support of the Republican leader and the Republican whip and the ranking Republican on the committee, Congress passed a bill which had a section on executive compensation and corporate governance. This one called on the Secretary to set appropriate standards. Frankly, excessive and unreasonable is a tighter limitation. Unlike this one, it isn't just the Secretary of the Treasury--it is the Secretary of the Treasury, in accordance with, and has to get the approval of the head of the FDIC, Ms. Bair, the Comptroller of the Currency. Yes, there's a consultation with the head of the oversight board. She has no vote on it. The votes are from the regulators. Let's stress again--this only applies, this bill, to people who voluntarily keep capital infusions from the Federal Government. If they don't like it, they can return the money. That's what an assault on free enterprise is. The ranking Republican said before that anybody who does business with the Federal Government might be subjected to that. No, that's not remotely true. It certainly isn't true in the bill. The bill explicitly says that if you do business with one of the covered entities, you're not covered by this. It explicitly says that. Not being able to argue against this bill on the merits, they then say, Well, what happened if it was applied 16 different other ways? I don't think it should be. I didn't know it won't be. Again, when people argue against what is not in the bill, but what might come, it's because they have no confidence in their arguments against the bill. We did adopt, with a majority of Senate Republicans, the leadership-- not quite a majority--but the leadership of House Republicans on these issues, President George Bush--we've already adopted rules that say, quite sensibly, if you take the Federal money, there are some restrictions. And if you don't like it, give the money back. Now the gentleman from Georgia said, Oh, but the bill goes too far because it doesn't just repeal what we did. And he talked about the Lungren bill. I hadn't heard about the Lungren bill. The reason is that the Lungren Republican bill was introduced after we had made clear what we were going to do on Monday, 2 days before we marked up the bill. It was not called to my attention. No member of the Republicans on the Financial Services Committee said, Let's just do it this way. We had an open markup. The Lungren bill could have been offered as an amendment by any Republican member of the committee. They did not do it. If they forgot, Mr. Lungren himself could have come to the Rules Committee and asked that it be made in order as amendment. They did not do it. They quietly introduced a bill, made sure that no one noticed it; called it to no one's attention; deliberately refrained from offering it as an amendment at an open markup, when they could have; deliberately refrained from going to Rules Committee and asking that it be made in order; and now they're complaining that it wasn't adopted. The fact is this: The Republicans regret losing the provision that was added mistakenly, in my judgment, in the hurried deliberations, hurried conclusion on the recovery bill. The gentleman from California mentioned this. The Senator from Connecticut offered restrictions. The Members on the other side baffle me sometimes--sometimes more than others. They are critical of restrictions. The gentleman from Connecticut offered restrictions on compensation. Presumably, they would denounce him for that. But as the gentleman from California pointed out, they are objecting to offering restrictions, and then they're objecting because somebody persuaded him the restriction shouldn't be so restrictive. Now we also have in here a provision that this will lead people to give back TARP money. At an earlier stage, before I think they reconsidered the total inconsistency of it, some of the Republicans said, Oh, this is a problem because it will give back TARP money. Of course, these are the same people who said they wished there was no TARP. So, first they don't want restrictions, then they complain because the restrictions are not made retroactive, then they complain when we take away the provision that restrictions wouldn't be retroactive. First they say they don't want any TARP at all, then they worry there will be a smaller TARP because people will give the money back. Here is the essential element of this bill. Apparently, my Republican colleagues do not want to say to the largest financial institutions that--and we're going to adopt an amendment, I hope, that limits this to the larger institutions because the community banks have been unfairly tarred by this. They didn't make the mistakes that led us here. They weren't part of the Republican majority from 1995 to 2006 that passed no legislation on Fannie Mae and Freddie Mac, that passed no regulation on subprime lending, that did nothing about any of the abuses in other areas, all of which we tried to correct when we came to power in 2007. But what we have is a bill that says if you get capital infusions of $250 million or more from the Federal Government and you decide to keep that money, then you should not make payments that are excessive or unreasonable. People said, what is that? Well, you know when you are running a company, you try to hold your expenses down to the least possible. You pay your employees, frankly, as little as you can get and still have them work. But there has been an exception to that at the top levels. We do say retention bonuses are a mistake, where people say, I have the secret to the formula and if you don't bribe me, I'm going to quit. We are saying, No, don't give into that. Give them performance bonuses, as you can do. So these are the issues, two pieces of this bill: Do we undo the restriction on retroactivity that was in the recovery bill that has been so denounced, and then do they lose their major source of ability to denounce? And, do you say to a bank that has taken more than $250 million in Federal funds: For as long as you voluntarily decide to keep that money, do not make bonus payments that are not performance-based and do not make excessive and unreasonable payments? Members have invoked the American people. I do not think the American people stand wholly behind the proposition that people should be able to keep the Federal money, not voluntarily return it, and then disregard any rules about who gets what. I do believe it is possible for institutions to use performance bonuses and to make payments that are not excessive or unreasonable, that will go, as the gentleman from California has pointed out on many cases, into the millions of dollars a year to some of the top people. These will be people who will be very well paid, people who will be much better paid, I guarantee you, than the auto workers who have borne the brunt of the Republican decision that it is okay to restrict. By the way, where were my colleagues who want free enterprise and no interference with wages when the Senator from Tennessee, Mr. Corker, was trying to drive down the wages of auto workers, American auto workers, and saying that the American auto workers shouldn't get the wages that are paid by the American companies? There is every argument being given here. But what I do not understand, as I listen to these inconsistent arguments that have no weight, what is it about saying that if you take Federal money voluntarily, you can't make excessive payments that troubles them?

Mr. FRANK of Massachusetts. Mr. Chairman, I demand a recorded vote.

Mr. FRANK of Massachusetts. I will yield.

Mr. FRANK of Massachusetts. Mr. Speaker, I demand a recorded vote.